FTSE 100 preview: Index seen steady amid US-China trade hopes

on Jan 7, 2019

The FTSE 100 looks set to start the new week in positive territory, building on the previous session’s rally, with investors eyeing trade talks between the US and China. Retailers will be in focus on the corporate front at the beginning of a reports-heavy week for the sector.

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Footsie looking up

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Reuters reports that the UK benchmark index looks set to open seven points higher at 6,845, according to financial bookmakers. The FTSE 100 is likely to take cues from Asia, where sentiment has been upbeat ahead of trade talks between the US and China.

“I’m not sure what the […] sort of fundamental substantive point of these trade talks will be,” Rob Carnell, ING’s chief economist and head of research for Asia Pacific, told CNBC’s ‘Squawk Box’ today. “I’m convinced that this will be displayed as a positive result, whatever they actually agree. What slightly worries me is that at times when the US administration delivers these sorts of positive results, it makes it very contingent on future activities.” US shares surged on Friday, following a better-than-expected non-farm payrolls report.

At home, the Footsie rallied in the previous session, gaining 144.76 percent to close 2.16 percent higher at 6,837.42, finding support in optimism over the US-China trade relations as well as the strong report on the other side of the Atlantic.

Monday’s agenda

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There are no major macroeconomic releases out of Europe to guide the market further this morning. In the US, the country’s ISM non-manufacturing purchasing managers’ index is due out at 15:00 GMT.

While no blue-chip companies are scheduled to update investors on their performance today, investors will have a lot to look out for on the corporate front during the rest of the week, including updates from FTSE 100 supermarkets Morrisons (LON:MRW), Tesco (LON:TSCO) and Sainsbury’s (LON:SBRY) as well as from high street retailer Mark & Spencer (LON:MKS).

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